eBook - Japan Business Toolkit 2015 - Philippe Huysveld - GBMC

Copyright © 2015 Philippe Huysveld – GBMC (www.gbmc.biz), All rights reserved
Japan Business Toolkit
Philippe Huysveld
Japan Expert and EU-Japan Business Consultant
GBMC (Global Business & Management Consulting)
Second Edition
Copyright © 2015 Philippe Huysveld
All rights reserved

CONTENTS
Introduction: Why go to Japan?
Part I – Cross-cultural Management
I – Culture Basics in Japan
II – The Sumo-way of Negotiating.
Part II – Sales & Marketing Strategies
III – Business Basics in Japan
IV - B2C Marketing
V – B2B Marketing
About the Author

INTRODUCTION: WHY GO TO JAPAN?
This Toolkit is a sample of a wider eBook whose title is “The Ultimate Survival Guide
for Business in Japan” and which is available online for sale (more details from our
website at: http://www.gbmc.biz/GBMC_eBooks.html).
The Toolkit as well as the eBook is targeted at business executives of companies:
 approaching the Japanese Market,
 reviewing their options in terms of Japan Entry Strategy,
 already exporting to Japan (Indirect Sales) or,
 already established and doing business in Japan (Direct Sales).
It is usually acknowledged that Japan is not an easy market to penetrate!! Trade
concerns previously expressed by EU officials usually relate to necessary
improvements on Tariffs and NTMs (Non-Tariff Measures), to tangible improvements
on Government Procurement as well as to Agriculture and Investment Possibilities.
Over the years and sometimes with much efforts, some companies have however
succeeded in the Country of the Rising Sun. Examples of popular EU Products and
Services in the Japanese Market are: shavers from Philips (The Netherlands), bakery
from Paul (France), furniture from Ikea (Sweden), vacuum cleaners from Dyson (UK),
the Polo hit-model from Volkswagen (Germany), mobile advertising services from MC
Decaux (France) …
Among large-scale EU Success Stories in Japan, we also have Airbus (commercial
planes), EUROCOPTER (helicopters), Thales and ALSTOM (railways carriages),
Knorr-Bremse (German brake systems for the “Shinkansen”), VEOLIA (Environment),
SIEMENS (Medical), GlaxoSmithKline (Pharmaceuticals) …
So, why bother going to Japan, investing time and money in entering this “difficult”
Market? There are many good reasons, like for example:
1. Companies might experience the need to improve the quality of their products.
“We feel that the quality of our products and the company as a whole have benefited
a lot from our relationship with Japan” (Helioscreen NV in 1997)
2. The Japanese Market being a source of potential company growth, companies
might have to reinvent themselves!
“For any company engaged in product innovation, quality control and focused on
creating brands with their own identity on a daily basis, the Japanese market is one
of the most important in terms of business value and potential company growth”
(Francesco Vespasiani, VUEFFE Srl, Italian leather footwear producer, in 2013).
3. Japan is a key Market and a gate to other Asian Markets: the enormous influence
of its Retail Industry attracts global attention and is at the origin of many Asian

trends. Japan being the first investor in China, it is also a business platform
towards the rest of Asia, where the future growth lays.
4. A tremendous market:
o A huge and homogeneous market: an advertising campaign in a
newspaper can reach up to 17 Millions of consumers with a strong
buying power and with similar tastes
o A market where customers fully appreciate technological features of a
product and are also ready to pay for it.
5. An Innovative market:
o Innovation is everywhere. Some SMEs are leaders in their field and, in
some cases, own some unique technologies.
o Japanese companies are open to alliances with companies allowing
them to broaden their portfolio or to tap into new foreign markets.
6. A market full of opportunities:
o The 2008 crisis has brought new incentives and opportunities for
investment, making entry strategies less complex and less expensive
than in the past.
o The Reconstruction Process after the 2011 earthquake disaster has
also triggered lots of incentives and tax breaks in the Tohoku Region,
from which foreign investors can benefit.
o For these reasons, there has never been a better time to enter this
market!
(Source: GBMC, Investir au Japon maintenant, CCE International #545, 2009)
7. Last but not least, Japan is a great Retail Laboratory, where new B2C concepts
are localized and developed. There is a prevalent myth that it is a country with a
monolithic culture and uniform tastes, but a walk in Shibuya, Harajuku or Shinjuku
(distinct areas in Tokyo) will proof you the opposite and show you various lifestyle
choices. In his analysis of key characteristics of Japanese consumer behavior,
Renaud Pretet concludes in 2010 that:
“There are still various segments with potential on the Japanese market, the most
obvious one being that of senior consumers. Retailing in Japan requires a complex
mix of humility and audacity in a mature market that seems to be evolving towards
more conscious consumption. Some industries, such as luxury brands, will have to
reinvent themselves in the next decade. More than ever, Japan remains a Retail
Laboratory and interesting experiments are to be closely monitored.”
Philippe Huysveld
Paris, May 2015

I – Culture Basics in Japan.
Before getting into the business side of things, I would like to underline how much
Cross-cultural Management Practices are key when approaching Markets like Japan.
Many export managers have experienced over the years in which way Time, Quality,
Reactivity and Service have another dimension/meaning in the Country of the
Rising Sun.
In 2012, the EU-Japan Centre carried out a “Survey of EU SMEs on their
Internationalisation towards Japan” (Source: “In Search for Growth: Towards a New
Role for SMEs in EU-Japan Relations”, EU-JAPAN CENTRE FOR INDUSTRIAL
COOPERATION 2013) with similar results. The obstacles most often mentioned by
respondents (126 European SMEs) include:
1. Language barriers (55%), 2. Difficulty to grasp business practices, 3. Costs,
4. Difficulty in understanding the local laws or regulations, 5. Conforming to
Japanese standards.
Knowing that exporters are conscious of the importance of cultural factors in doing
business with Japan, this cultural gap can be problematic. Executive Training
Programs like ETP, DBP, HRTP, Vulcanus (organized by the EU-Japan Centre) and
YES (organized by the BJA) aim at filling the gap.
Therefore, there is no way out of it and the business executives approaching Japan
ought to be aware of the need to constantly implement the Cross-cultural "4Ps":
1. Patience: credibility and trust are key and can not be built overnight!
2. Presence: you must be there on a regular basis, always contactable in
person, as the ambassador of your company!
3. Presentation: you must tailor your behaviour, communications and
"personal branding" to your Japanese audience!
4. Perspective: you must see things from the viewpoint of someone with
another background, in another business/social and religious culture from
your own!
(Source: “The Master Key to Asia”, David Clive Price, available from
http://davidcliveprice.com/master-key-asia )
"Money grows on the tree of Persistence." (Japanese Proverb)
“It is not the strongest of the species that survive, nor the most intelligent, but the one
most responsive to change." (Charles Darwin)
The country of the Rising Sun is a country with strong cultural context: the
Japanese retain a wealth of information on people and maintain, through an
extensive network of friends, colleagues, customers, suppliers, close personal
relationships. The ideal communication is indirect (subtle hints), non-verbal (else,
suspicion) and emotional (frequent in commercials).

Four pillars of Japanese culture are:
1. Collectivism and group spirit: the “karaoke” is a good demonstration of
team spirit;
2. a strong hierarchy, often based on seniority, synonymous of experience
and wisdom;
3. an accurate control of the uncertainty, in order to create a sense of security
in the society;
4. a strong division of roles between genders: although the situation has been
changing, part-time roles and OL “office lady” jobs for women remain
widespread.
Moreover, Japan is a country of monochronic culture, individuals generally doing
only one thing at a time. Therefore, pursuing an objective will always be done in
stages (“junban” in Japanese) and Japanese will usually not be allowed to leapfrog.
Five Japanese Standards of conduct are:
1. WA: notion of harmony within the group: there is no place for individualism.
Support smooth teamwork, avoid confrontation, blend in.
2. TATEMAE vs HONNE: Façade/Public opinion (what would be the
appropriate thing to say or to behave in a situation) vs Personal
opinion/inner feeling (what I really think or feel). “Tatemae” is only a
tool/lubricant that enables to maintain harmony between group members.
Getting to know the “honne” requires time and trust!
3. GAMAN: patience/endurance: it should be exhibited by any « gaijin » (« the
man from outside ») who wants to do business with the Japanese.
4. KENKYO: modesty/humility: keep a low profile, be accurate about
information given and listen before speaking.
5. “ANZEN Dai-ichi”: safety/security first! Be safe, avoid unnecessary risks,
have contingency plans. Take precautions on top of existing precautions.
Consequently, Team work will be done according to several principles:
1. Identify the problem rather than who to blame, the objective is not to punish,
but to solve together all the problems and overcome obstacles.
2. Do not rest on one’s laurels: constantly question oneself (“kaizen” or
continuous improvement process) and progress step by step carrying out
slight changes; markets changing quickly, the Japanese have learned to
continuously improve their product lines.
3. Take collective decisions, involving and committing all team members.
Fully briefed, members will be more able to enforce the decision later. With
the aim of a good collaboration, the Japanese have also at heart to
integrate all members in their group, in order to bring order and serenity.

4. Remain specialized: gradually improve what is on going, rather than doing
several things at a time (monochronic culture). Decisions on diversification
will therefore be slow. It is also a way to avoid the unknown.
Japan being a country with strong cultural context, personal relationships must be
developed and maintained. This is called « Relational Maintenance ». To do so, one
should:
1. learn about each other by sharing some free time (during a mission, for
example) so as to build mutual trust. This need to socialize (“karaoke”
evenings, golf, restaurants) exists once there is adherence to a group, as
soon as a business flow is created.
2. visit clients, as often as possible, in order to strengthen ties, which also
helps to understand, listen to and anticipate customer needs: this is also
part of the service!
Main Source: « Japan: The Sumo-Way of Negotiating », Philippe Huysveld,
“StoriesJapan.com” Blog, August 1, 2013 (Internet link: http://storiesjapan.com/japan-
the-sumo-way-of-negotiating/#!)

II – The Sumo-way of Negotiating.
“Difference is a concept you must own, deepen and further put into practice.”
(H. Lefebvre)
In export business, success depends, among others, on the ability of managers to
understand and manage differences of culture and society. Understand means,
above all, to be able to put oneself in someone else’s place and to be tolerant. In
Asia, in Japan, time (long-term relationships) and family (group spirit) are perceived
differently. Insecurity comes from the fact that all the facts are not known to the
manager, hence the need for export specialists.
In Japan, the obstacles to the conclusion of a business are mainly of two types:
1. the dynamism and sophistication of a highly competitive market, explaining
the need to offer a range of quality products, adapted to consumer needs
(difficult customers), innovative and competitive in price;
2. socio-cultural barriers, present at the negotiation stage. We will develop
hereunder this aspect of the problem.
Broadly speaking, an international negotiation has four characteristics:
1. its duration: in Japan, decision making is slow, but its execution is fast, the
company wishing to know in depth the potential partner;
2. its fragility: the interpretation of an agreement may be different depending
on the socio-cultural value system or the partner may simply not be in good
faith;
3. the complexity of the issues dealt with;
4. the risks, many elements not being known or controllable.
In the particular case of Japan, it should also be emphasized the importance of the
initial investment, not only in terms of capital, but especially in terms of continuous
efforts.
The “Japanese system” has peculiar characteristics at three levels:
1. the Japanese society: it is characterized by a high degree of competition,
either between individuals (witnessed by the ruthless entrance exams to
high schools and universities) or between firms (in order to satisfy
demanding customers); in addition, work relationships (and others) are
established in the long term, justifying therefore high levels of investment;
2. the Japanese company: the hierarchy of power is undisputed, but the
leader’s role is to maintain group cohesion, rather than a decision-making
role; therefore, decisions are usually made by consensus, but the leader
may occasionally have to guide a (less experienced) member and then to
take decisions for him.
3. the Japanese negotiator: generally dislikes arguments; very sensitive, he
strives to avoid conflicts for the sake of harmony; in western eyes, the
Japanese (unlike the Chinese) is not a “great negotiator”: his strength is in

the group cohesion and he prefers a balanced agreement that lasts in the
long-term; finally in Japan, the concept of silence has another meaning: it
is either a sign of consideration / reflection, either the expression of
discomfort (with a smile) or even of a disagreement (gloomy faces).
Negotiating a contract, in Japan, usually takes a long time (unless there is a
pressing need) and requires extensive travel. The steps are the following: product
presentation, sample dispatching, first test order, evaluation by the customer
(delivery time & product quality), the actual order if all goes well. Everything looks like
a ritual until the signature of the contract, decision making being rather formal: there
will be automatically agreement, when there are no more objections/questions left
(consensus).
The principles of intercultural communication can be illustrated by an analogy
to Sumo wrestling:
1. The wrestler comes in and throws a handful of salt in order to purify the
ring: no negotiation can start without a proper exchange of business cards
(“meishi”). Indeed, the purpose of these cards is to tell the other side your
hierarchical status (your rank in the company or the organization). The
Japanese will try to remember and pronounce your name correctly, and if
he speaks to you in Japanese, he will use the “polite expressions” suitable
to your rank. The inclination of the bows will be another sign.
2. The referee acts as an intermediary as well to obtain a contact (the
practice of being introduced by a third party is widespread and is one of the
rules of etiquette in Japan) as to unlock that negotiation at a later stage
(the use of a third party allows to contain clashes caused by a
disagreement). The Japanese beware of strangers and like to gather
information (this is not only curiousity) in order to reduce uncertainty.
3. Wrestlers face each other with their fists on the ground and focus in order
to better understand the enemy: nothing concrete will come out of the first
meetings during which you will be screened and analyzed. Great listeners,
the Japanese record as much information as possible and are willing to
take the time (time has another dimension than in Europe) to prepare a file.
Decision making is slow, but its implementation can be very quick.
Commitments are long term and are considered as final.
4. The winner is the one who has knocked down his opponent. In fact, if the
deal is fair, there is no clear winner: the Japanese always prefer a good
compromise, well balanced for both sides and focused on the long term.
Moreover, in a problematic situation, they try not to lose face themselves
(this is also the case in everyday life), nor to let their opponents (which they
respect usually) lose face.
5. The Japanese give greater value to harmony than to truth: they are
reluctant to engage in an argument that can conduct to create unrest within
a group or between two parties.
6. The feeling of obligation to a person who has served them well (gratitude
and loyalty are important values) can be a powerful drive in their behavior.
Every act is rarely disinterested in Japan.

7. Before and during the negotiation, there are no friends: there is a business
to be made in the best conditions. Like a baseball tournament, the team is
braced in one single direction: the goal.
Practically: how to negotiate a contract?
The establishment of initial contacts is the first phase. The company will participate
in trade fairs and missions sponsored by the relevant authorities. Through the
Embassy, the economic and commercial attaches, official agencies and other
intermediaries, introductions following the right protocol can take place. Under these
optimal conditions, the Japanese will feel compelled to receive you (otherwise
courtesy visits) and will, perhaps, put a valid interlocutor at your disposal.
Never show impatience, sign of weakness in their eyes. Indeed, the Japanese need
time to learn about their potential partner. They will ask for references. You should
use this time in order to perform your own investigations. Collect as much data as
you can.
The first interview will be rather an observation round. After the exchange of
“meishi”, each side will listen to the presentation of the other, without interrupting.
The Japanese have a great ability to listen, they often double check facts (indirect
communication). They are also finding out if they can trust you. The challenge is to
ensure a balanced exchange of information: the Japanese will only give you the
information you deserve.
It is best to ask yourself many questions. As non-verbal communication, eyes,
gestures, facial expressions can say more than words (the Japanese have often the
ability to better hide their emotions) and are, as such, revealing. At this stage, it is
better to present only an outline of your proposals. Do not progress without getting
something in return.
Comes then the active phase of the negotiation. Trust having been established, the
decoding of the positions of the parties remain difficult: the Japanese avoid key
issues from the start and therefore avoid a frontal attack on the potential
disagreements (only mention pricing towards the end). Be sure to earn the trust (and
approval) of the whole group and not of the leader only (group decision).
As technicians & engineers usually tend to agree with each other more easily,
constructive dialogue must begin between them. Make sure the first concessions are
made simultaneously, in order to avoid being considered as the weaker partner. In
fact, you must convince them of your ability to meet the needs and requirements of
their business.
Remain focused. It is always better to repeat several times, so that the message is
correctly understood. It is useless to bargain or to put them under pressure. The
Japanese have no gift for haggling and may lose confidence & trust.
Japanese businessmen often use an interpreter:
- either to give themselves some reflection time;
- either to understand the entire message (desire to master every detail of the
discussion).

They like to have a clear picture of their interlocutors, that is, to be able to classify
them with certainty (based on the “corporate image”), hence the interest to continue
the meeting outside (in bars).
Finally, in Japan, the practice of exchanging gifts is everywhere: by doing this, the
Japanese show their commitment to an already established relationship (notion of
“Relational Maintenance”). Carry out a constant follow up. The negotiation will be
long: it is your resistance and consistency which will be tested.
Of course, you always need a bit of luck in business. Poor communication will lead,
without mistake, to failure. The road is long and bumpy (copyright issues, exclusivity,
abnormally low level of sales). It will lead, hopefully, to a letter of intent between both
parties.
It is above all a question of trust between people. Imagine that you have to go to
Japan in order to ask the father of your girlfriend (Japanese) for the hand of his only
daughter. You will need to persuade and please. Better bring gifts and have good
references. Especially be patient at all times and keep smiling.
Note of the Author:
Part of this text has been published as an Article under the following Reference:
« Japan: The Sumo-Way of Negotiating », Philippe Huysveld, “StoriesJapan.com”
Blog, August 1, 2013 (Internet link: http://storiesjapan.com/japan-the-sumo-way-of-
negotiating/#!)
As well as in French under the Reference:
« Japon: Aspects Culturels de la Négociation », Le Cercle Les Echos, June 3,
2012. (Internet link: http://lecercle.lesechos.fr/economie-
societe/international/asie/221147530/japon-aspects-culturels-negociation)

III – Business Basics in Japan
In their book “Keiretsu: Inside the hidden Japanese conglomerates”, Kenichi
Miyashita and David Russell report the following comment from a Japanese business
man about American business men landing in Japan:
“How can anyone come to do business here without having at least a general idea of
how a country’s business system operates?”
Legitimate comment, indeed. Well, in this book, I will write about Business in Japan,
and I will highlight what the reader should know.
The Classical Marketing Theory tells us how to create a successful Mix of:
 the right Product,
 sold at the right Price,
 in the right Place and
 using the most suitable Promotion.
That is, the Product has to have the right features (for example, it must look good
and work well); the price must be right, as you will need many customers to buy it;
the goods must be at the right place at the right time; the target market needs to be
aware of the existence and availability of the product through promotion. It is known
as the Rules of the 4Ps.
Let us see now how to apply these basic rules to the specificities of the Japanese
Consumer Market. To do that, I will tap into my own experience, as well as analyze
over 50 EU Success Stories in Japan. From the feedback obtained from the many
executives interviewed, I can state, without doubt, that common points and general
recommendations are:
 Long-term approach, commitment and perseverance
 Regular visits to Japan in order to establish personal contacts &
understand customer needs
 Japan dedicated, committed & trained staff
 Adopt a Step-by-step approach
 Choose carefully your market segments
 Demand for high-quality & customized products. Everything should be
perfect: from product and communication to packaging and delivery.
 Flexibility towards requests to adapt the product. Supply both standard &
tailor-made products.
 First-quality service: no compromise!
 Demonstrate your commitment to your client’s interests and needs
 Long cycle of questions and answers
 Supply as much detailed product information as you can
 Keep your word and promises made to Japanese customers
 Find the ideal partner with a well established distribution network in your
field.

Finally, I would also like to summarize in the Table hereunder a few inspiring
quotes of successful companies in Japan, as well in the B2C as in the B2B business
areas:
DMV
Comelco
“A commercial relationship is seldom short-lived in Japan if you can
keep up well-defined quality standards.”
Interbrew
Rombouts
“A zero percent defect is expected by suppliers.”
“Only the best is good enough for Japan”
Innogenetics “A key difference is the precision and the strictness of the Japanese
towards product specifications.”
UCB “At an early stage a few people were chosen whose main mission
was Japan.”
BARCO “In order to get information in Japan, it is essential to speak
Japanese”
IBA “Another important element to succeed in Japan is the after sales
service.”
Magotteaux “Looking back at our experience, finding the right partner was the key
element to our success.”
LMS “In Japanese business, commitment bears a direct relation to time
allocation.”
BEKAERT “Extravagant? Yes, the cost of winning loyalty in Japan can be very
high.”
Cortina “Even if 98% of an order is supplied, Japanese will consider it as an
incomplete delivery.
Agena/Delsey “For us, the Japanese market is a benchmark – in terms of
functionality and quality. Most innovations in the photography market
originate in Japan. Products are being launched in Japan months
before their introduction in other part of the world. A continuous
relationship with our Japanese partners is therefore important with
respect to our product strategy.”
Source: Export to Japan: 20 Belgian success stories, BJA, 1997 & 2003.
Source: “Get to know your Client and Adapt”, Philippe Huysveld, Market Report
(60 pages) for the EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION,
October 2013. (Internet link:
http://www.eubusinessinjapan.eu/library/publication/report-get-to-know-your-client-
and-adapt)

IV - B2C Marketing.
Many export managers have experienced over the years in which way Time, Quality,
Reactivity and Service have another dimension or meaning in the Country of the
Rising Sun. The interest of Japan Success Stories lays in what they usually
showcase, that is, Persistence and Concepts like “Getting to know your Client” or
“Adapt and Change”, more than in the very results achieved. Cross-cultural
Management Practices are very important when approaching Markets like Japan.
However, in this Chapter, we will rather focus on the business side of things.
"Money grows on the tree of Persistence." (Japanese Proverb)
“It is not the strongest of the species that survive, nor the most intelligent, but the one
most responsive to change." (Charles Darwin)
So why bother going to Japan, investing time and money in entering this difficult
Market? Among many good reasons, Japan is a great Retail Laboratory, where new
B2C concepts are localized and developed. There is a prevalent myth that it is a
country with a monolithic culture and uniform tastes, but a walk in Shibuya, Harajuku
or Shinjuku (distinct areas in Tokyo) will proof you the opposite and show you various
lifestyle choices.
In his book Japanese Consumer Behavior, John Mc Creery wonders:
“Can we safely ignore the fact that, while all these generations have grown up in a
place called Japan, each has come (or is coming) of age in a radically different
world?”
Mc Creery also points out that:
 even the Japanese “salaryman” has different faces: his private self, his work
self, his social self and his family self are all different, with distinct consumer
preferences.
 Women, children and the elderly, often neglected in a generic image of Japan
Inc, are also important customers and have their own lifestyle patterns.
Further, Japan is the world’s second-largest Retail Market after the US (the
country’s retail sales in 2007 were estimated to 135 trillions JPY or 1,124 billions $),
thanks to the high level of per capita income that gives Japanese consumers
considerable purchasing power. It is a mature market and, for foreign retailers, there
are diverse opportunities to sell products and services that offer luxury (high-end
retailers), style (fashion items for the apparel market), convenience (non-store
retailers) and high value (that is, improving lifestyle, environment and health of
customers).
It is also often said that products succeeding in the Japanese Market will have a
better chance of success in other markets around the world. Further, Japan’s Retail
Market attracts customers from across Asia, who visit the country for shopping.

Zoom on B2C Business
First of all, what is B2C? We will use the following definition: “Business-To-
Consumer: A transaction that occurs between a company and a consumer, as
opposed to a transaction between companies (called B2B). The term may also
describe a company that provides goods or services for consumers.” (source:
InvestorWords.com).
Anyone shopping or retailing in Japan will quickly spot Japanese specificities
(compared to Western standards) impacting the Japanese consumer behaviour,
lifestyle, purchasing habits, preferences of merchandise, design taste, response to
marketing campaigns and service expectations.
All those specificities draw a specific Japanese mindset and impose specific
service and marketing implications for any company willing to retail in Japan. Among
key elements of the “mindset model”, we have: Novelty seeking, High quality
standards & service expectations, Fun-Shopping, Relative Price Sensitivity &
Attractiveness of imported goods.
However, nowadays, Japanese Consumer Behaviours are changing. So far,
Japanese consumers have long been both distinctive and predictable, frequently
visiting high-end department stores and pricier regional supermarkets. They were
willing to pay high prices for quality products and their love of brands sparked the
emergence of a mass-luxury market.
Why and How consumer behaviour is changing?
Various structural reasons can be put forward: the current economic downturn, the
digital revolution, the emergence of a new (less materialistic) generation ….
Hunting for value, spending more time at home, buying differently, Japanese
consumers are changing not only WHAT they buy but also HOW they buy it, looking
for fulfilling lifestyles, as well as becoming health and environment-conscious.
Further, the Japanese Internet Retail Market Growth and Online shopping are
central to both the economizing and the nesting trends. The ability to browse
products, compare prices and make purchases relatively anonymously is creating
new attitudes and empowering consumers.
So, knowing now more about the Retail Market in Japan, how do you Adapt your
Consumer Product/Service? That is, How to apply the Rules of the 4Ps (of the
Classical Marketing Theory) to the specificities of the Japanese Consumer Market?
To do that, we analyzed over 50 EU Success Stories in Japan.
Recommendations for your B2C Marketing Mix in Japan
From the feedback obtained from the many executives interviewed and from our own
experience, we propose the following:

 Product: Target the right segments. Pick your best products, eventually adapt
them or customize them, test them or design new exclusive ones for Japan.
Keep innovating and refreshing, choose your target market segments carefully,
select the finest and most adequate packaging. Build a story or an emotional
bond and communicate a strong brand image! Have stricter quality controls
made on any product bound for Japan.
 Place: Go for Multiple Sales channels: other selective channels than
department stores, including private-brand stores and mail order/online
shopping, should be considered in parallel. Provide customized, full
scale/integrated, quick and on time, local, impeccable Service. Study and
Understand the Distribution Network.
 Price: Position your product as a premium product (higher pricing) or as a
value product (competitive/affordable pricing), eventually suggest a
recommended retail price. Take into account import duties, exchange rates,
packaging & distribution costs. For luxury items, eventually adjust pricing
down: consumers are nowadays more cautious in buying and do spend more
time in comparing prices (even abroad) and seeking for advice.
 Promotion: There are many ways to promote your products or services. Do it
regularly and in an original way that suits your business best, preferably
involving your Japanese distributor or partners. For luxury products, the
shopping experience is everything. Build a sense of lifestyle (for example,
evoking elegance, fun or opulence) around products, through concept stores
and other experimental branded retail venues. Digital marketing, online
presence and social media are important for all companies in Japan, but is
especially a must for luxury brands.
Note of the Author:
“Guidelines for B2C Marketing in Japan”, Philippe Huysveld, EU-JAPAN CENTRE
FOR INDUSTRIAL COOPERATION, March 25, 2014. (Internet link:
http://www.eubusinessinjapan.eu/library/publication/article-guidelines-for-b2c-
marketing-in-japan)
The original Source is:
“Get to know your Client and Adapt”, Philippe Huysveld, Market Report (60
pages) for the EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION, October
2013. (Internet link: http://www.eubusinessinjapan.eu/library/publication/report-get-to-
know-your-client-and-adapt)

V – B2B Marketing.
"The golden rule for every business man is this: Put yourself in your customer's
place." (Orison Swett Marden)
Before we start, let us remind you that, from a business perspective, B2B
professional markets differ from B2C consumer markets in many ways, among
which:
1. the complexity of the purchase decision: there are often many
people/departments involved.
2. B2B buyers are experts and B2B decisions are more considered
3. high value spent (large transactions in value) and the 80:20 rule applies
(also called the Pareto Principle: of the things a manager does during his
day, only 20 percent really matters and produces 80 percent of the results):
give extra weight to the opinions of key accounts.
4. all demands in B2B markets are derived from demands in a consumer
market
5. less choice or ability to switch supplier (time and cost implications)
6. smaller customer base, opening more opportunities in terms of relationship
building and personal contacts
7. personal customer relationships are crucial, with the need for personal
visits to key customers
8. technical products with client requests for technical data sheets and
technical performance data.
Zoom on B2B Business
We will use the following definition for B2B: “Business-To-Business: A transaction
that occurs between two companies, as opposed to a transaction involving a
consumer. The term may also describe a company that provides goods or services
for another company.” (source: InvestorWords.com)
Japanese Trading Companies and Japanese Banks gather a lot of information about
Industry trends (domestic and overseas), about their clients, about their suppliers and
about their business partners, among others. In a similar way, it is therefore important
for foreign companies to gather information about B2B business in Japan, as well
as to find out as much as possible about their professional Japanese clients.
Needless to say, using B2B Directory sites is a very first action to take. These sites
are popular in Japan too, although Japanese companies tend to rely on off-line
business networks to find partners. In addition, the Reconstruction Process in
Tohoku region, as well as the governmental policy of Industrial Clusters nationwide
also constitute potential sources of business opportunities.
“Always deliver more than expected” (Larry Page)

Where to find B2B opportunities?
 B2B Directory sites:
As a first stop, the JETRO website holds a very useful “Business Opportunities”
section providing 3 types of databases: a Business Matching Database (TTPP or
“Trade Tie-up Promotion Program”), an Online Trade Fair Database (J-Messe) and a
Japanese Government Procurement database.
In parallel, Private Online B2B Marketplaces are essentially professional
matchmakers helping businesses to find each other and providing an exchange
where they can do business together in a professional way. New B2B sites emerge,
others disappear. In the end, there are a couple of leading online exchanges in
each category, as well as a few non-specialist general B2B exchanges.
 Public/Government tenders/contracts
Essential part of the opening of Japanese Public Markets to the world, more
procurement information is available now in English. The JETRO website gathers
government procurement information under two categories: National Government
procurement notices and invitations, as well as, Local Government procurement
information featuring a Search for 47 Prefectures and 20 Designated cities, plus,
Links to 42 Core Cities and 40 Exceptional Cities.
However, as the huge amount of available information is translated from Japanese
into English using a private automatic translation service, it might not always deliver
accurate results.
 Clusters and Special Zones:
Among recent Incentives to attract foreign companies and investments in R&D
facilities and Asian regional Headquarters, the Japanese government implemented in
2011 the Comprehensive Special Zone System (7 zones or clusters) with special
regulatory measures and tax, financial and fiscal support measures as a
comprehensive policy package.
In addition to these clusters, following the March 2011 devastating Earthquake in
Tohoku region, the government created a Special Zone for Reconstruction,
together with a new governmental agency (the Reconstruction Agency) with a view to
promoting and coordinating all the reconstruction policies in an integrated manner,
involving the (domestic and foreign) Private sector.
Recommendations for your B2B Marketing Mix in Japan
From the feedback obtained from many executives (analysis of over 50 EU success
stories in Japan) and from our own experience, we propose the following:
 Product: Whenever necessary, Innovate, Develop a New Product from scratch,
Redesign a Product, Adapt your Packaging, Integrate your Products with third
party Products/Services, eventually fully Customize your Products in order to
meet your customer needs! Constantly upgrade software, improve your

products and keep up with new trends. Provide a Japanese user interface as
well as user manuals in Japanese. Go for Industrial projects with local partners.
 Place: Sales through a licence/partnership agreement or a Joint-Venture can
ease the long product registration process in Japan or may allow to avoid the
complex distribution system. Demanding technical (state-of-the-art technology)
and service (24 hours a day, 7 days a week support) requirements fully justify
local branch openings in order to support, as much as possible, in real time
(without waiting for the reply from headquarters) Japanese customers in
Japanese.
 Price: Higher product performances (or premium brands in case of cars) might
justify premium pricing in Japan but it is usually advisable to go for a
competitive pricing, relatively in line with market prices. Consulting fees,
Maintenance fees, System Integration & Additional services might generate
additional incomes. Check the competition and compare with your offer. What
kind of products or services do they offer? Within which time frame (delivery
times) and at what prices? What are their payment terms? The extent of your
installation list in Japan (key reference projects) might impact your pricing
policy. If you are new on the market, work with competitive pricing.
 Promotion: Especially for technical products, your company or your distributor
have to run product demonstrations and technical seminars/workshops in
order to show concretely what your (new) products can really do: specification
sheets are not enough to sell! Organize regularly Open Door events, technical
seminars & training workshops (preferably in Japanese). Support your clients
and business allies with the necessary hardware for their shows. Attend key
Trade shows and let your products be visible everywhere. Invite the Press, of
course. “Successful Demos speak louder than words”. Invite your VIP clients
to your Headquarters and escort them yourself! Advertise your company’s
reference installations or projects in Japan and eventually worldwide.
___________________________________________________________________
Note of the Author:
“Guidelines for B2B Marketing in Japan”, Philippe Huysveld, EU-JAPAN CENTRE
FOR INDUSTRIAL COOPERATION, June 2014. (Internet link:
http://www.eubusinessinjapan.eu/library/publication)
The original Source is:
“Get to know your Client and Adapt”, Philippe Huysveld, Market Report (60
pages) for the EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION, October
2013. (Internet link: http://www.eubusinessinjapan.eu/library/publication/report-get-to-
know-your-client-and-adapt)

ABOUT THE AUTHOR
With a double Engineering and Business background, holder of a MBA from Kyoto
University, after 15 years+ as a Senior Executive, Philippe Huysveld is now a
Business & Management Consultant.
He is founder of GBMC (Global Business & Management Consulting) and his major
business activity is Europe-Japan Consulting. Philippe Huysveld is an (Independent)
Japan Expert registered as such at the EU-Japan Centre for Industrial Cooperation
(http://www.eubusinessinjapan.eu/support/huysveld-philippe), for which he has
written various Market Reports about Business in Japan and in Europe.
In addition to Consulting, Philippe Huysveld has lectured on «The History of the
Japanese Economy» and on «Social Structures of Japan» at the Cergy-Pontoise
University (in the Paris area), within the Master Program in Languages and
International Trade – Japanese Markets option.
He is also the Author of the following eBooks:
1) “Lecture Economique de l’Histoire du Japon” available on Amazon/Kindle
(http://www.amazon.fr/Lecture-Economique-lHistoire-Japon-
ebook/dp/B00BVKIHP8) and other sites (Lulu, Kobo, Google Play, Youscribe).
2) “The Ultimate Survival Guide for Business in Japan” available on
Amazon/Kindle (http://www.amazon.fr/dp/B00MV1R65S) and other sites (Lulu,
Kobo, Google Play, iBookstore, NOOK, Youscribe).
As a cross-cultural trainer, Philippe Huysveld also gives seminars/conferences about
Japan, as well as leading workshops on «Business Relations with Japan» in
Business Schools, such as the Vesalius College in Brussels.
Contact : info@gbmc.biz, www.gbmc.biz, www.gbmc-blog.biz

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